PUBLIC RECORD OFFICE
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Reference :-
C.O. 885
24 PUBLIC RECORD OFFICE, LONDON
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26 November 1914.]
OVERSEA PRIZE DISPOSAL COMMITTEE:
Mr. HUGHES and Mr. W. RICHARDS.
14. (Chairman.) Yes Will the stores which are on board the ship be included or excluded from that cost? That puts the question clearly.
15 I should say that the stores which are on board can be used for that purpose without extra charge to the individual?-For the benefit of the merchant?
(Chairman.) Yes.
(Mr. Tennyson.) I should like to consider that.
16. (Mr. Malkin.) It seems to me as to the col and stores, with regard to the maintenance of the ship in the port, you are fairly entitled to charge that against the shipowner, but if you used it to send the ship on to another destination. I am not sure at all that you are not bound to replace them at the end of the war-(Mr. Richards.) The owners have been paid full freight for the full voyage,
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17. (Chairman.) That is really the ground that I You must remember this that this is an eutirely new departure, absolutely. There are precedents. There is nothing to guide us in what we are doing at all, and I consider we have a perfect right to make our own precedents. The whole question as to the final settling up and the charges which have got to be paid on the ships when they are returned is a matter for discussion at the end of the war. But in these particular cases, in regard to taking the ship on to complete her voyage which she had started out o, to deliver the cargo which she then carries (I not considering the case of embarking any other cargo) to the various ports of destination, I should certainly hold that we could perfectly well use coal and stores which are at present on board the ship as far as they will go. If you have to put in fresh stores, that is to say, if you have to have more coal or take in more water or oil then it will be a definite charge on the cargo. But as the ship stands at the present moment. I should certainly say that they could go on?-(Mr. Hughes.) We understand that the "Birkenfels" has only 100 tons of coal. How much the other ships have. I do not know. In making ont these figures, I assume from the lawyers and Mr. Tennyson that we have not to take that into consideration. If we used the stores on board, that would be different, but we have not even permission tu use them.
18. I think it would introduce quite a new complica- tion into the business. It would entail considerable extra expense, which I do not think could be fairly charged on the cargo which is to be carried. The nusjority of that cargo has already paid its freight — All of it, or the bulk of it. (Mr. Richards.) The whole of it, you may take it.
19. Then I do not consider that there is the slightest claim, and I would resist it to the utmost of my power, on the part of the shipowners to have anything returned to them that would under ordinary circumstances have been used in the prosecution of her voyage-The next items are the cost of insuring the ship. Could you do anything to throw upon the ship the proper share of the burden? For instance, you will stick to her when she gets to Australia. Cannot you hold her for security for a certain sum which the owners ought to bear to complete the voyage? It is about 5,0001. in one case and 3,000l. in (Mr. Hughes.) The insurance is very heavy. another. (Mr. Richards.) It is not insurance I am speaking of. Well, it is partly insurance.
20. What I think we had better come to first of all is this. 1 do not want to divide it into its various items. What do you consider, under these new con- ditions. would be a fair lump sum to complete the voyag»?—(Mr. Richards. We must follow out one or two items. There is the cost of insurance on the ship,
21. That will fall on the cargo owners? Caunot you make the owners of the ship ultimately bear that as against the expenses saved ?
22. I would not like to say that ?—If you could undertake to stick a lien on the ship as against the expenses it would relieve the cargo, which should be relieved as far as possible.
[Continued.
(Chairman.) I agree, but I do not think you can relieve it from the charge.
23. (Mr. Evans.) That is at somelsdy else's expense. If you relieve the cargo of that proportion you have to charge the insurance of the ship against some fund ?— Against the ship before you hand her back.
24. (Chairman.) You have to exact that, and that comes to a question of policy. It comes to a question of what we are going to get out of the German Govern- Of course, it may ment at the expiration of the war. turn out that we get the ship, and that nothing will be returned. I cannot tell you. But I think for the purposes of our present discussion, you must take it that the cost of insurance will have to form part of the expenses of transferring the ship and taking her cargo on. If we can get the return, well and good, but we connot say now?(Mr, Hughes.) We shall have to insure the ship in the usual maritime way, and also the war risk, and we have also to insure the ship, according to Mr. Tennyson, at such a figure as could withstand anything that could happen. Assuming there was a total loss of the ship, for instance.
25. Of course you have to insure against total loss? -1 cannot take the value of the ship. I have to take the very outable value, and that is going to increase the expense. Of course you understand that. For instance, I think with regard to the " Birkenfels" we shall have
to take 75,000l. for her or perhaps 70,0002, and the Apolda " 70,000l. That is more than I consider is the market value of those ships.
•
(Chairman.) Will it be necessary to insure more than the ship's value?
(Mr. Tennyson. What we were going on was this We have assumed that the German owner will not be bound by the appraised value put on the ship by the
court.
(Chairman.) I do not think so. I think there again ho will have no right of claim. This is entirely academic, you may say, because there is no precedent, but I should say that he would have no right of claim for anything above the appraised value of the ship. The Crown has the right of requisition. That means to say the Crown may take over the ship and pay her That is all that he has appraised value to the owner.
a right to claim.
(Mr. Tennyson.) But not being a party to the proceedings it seemed to me he would not be bound by the appraisement.
(Chairman.) Although he is not a party to the proceedings he is a party to the war. and he has to suffer by the facts of the war, and he has got to accept what the Crown is willing to give him.
(Mr. Tennyson.) To that 1 quite agree. (Chairman.) He cannot go further than that. He hus to accept what the Crown is willing to give him out of its bounty; that is all.
(Mr. Tennyson.) What he can get diplomatically
really?
26. (Chairman.) Yes, that is what it amounts to It will depend a great deal upon the result of the war. If we get knocked out we shall probably have to pay heavily; if we come out on top we shall be able That is what it amants to make our own terms.
Assume that to?-Mr. Hughes.) Let me put this case. one of these ships is worth 35,000l. about it.
I am sure that is Now the ship is a total loss and after the war the owner says: "If you had not interfered with that ship I should have recovered 50,0001, if she was Just in the usual way. Now I want you to pay mie ** that 15,900." That is the responsibility I shall have to take. That being so of course I have not to insure the ship for 35,000l.. but for some tremendous.y outside value to cover myself against any responsibility
of that sort.
(Chairman.) I do not think we can put it up to
that.
(Mr. Tennyson.) So much the better if we can get out of that.
I think if we say 27. (Chairman.) I think we can. the ship is insured for her full appraised value-cho will have to be properly valued-hat that is all that can reasonably be required. You are satisfied with that--Then I should have to have a guarantee of
26 November 1914.]
MINUTES OF EVIDENCE.
Mr. HUGHES and Mr. W. RICHARDS.
chat from you.
When we talked about guarantees the other day, Mr. Temyson said: "I will give you no guarantee."
28. That is quite a proper way to approach the matter?---Of course we do not want any guarantees, but directly we do not get a guarantee then we have to cover ourselves.
29. I take it in this case you would be acting as the agent for the Crown?--That was not clear from what Mr. Tennyson said: I could not get that out of him I wanted to, but I could not.
(Chairman.) Is not that the real case? (Mr. Tennyson.) No, 1 think Mr. Hughes will be That is the way acting as agent for the cargo owners. we approached it.
[Continued.
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34. What have you got to insura ?---4 Mr. Richards.) As I understood it before, the whole cargo had to be insured, including all risks and liabilities of every description. Ordinarily in a caso like that it would be sufficient if an insurance were done on contractor's
liability. I took down the wording of such a thing to show you. It was quite tentative, but this would be. the type of thing that could be had very cheaply. (Hunding document to the Chairman.)
(Mr. Tennyson.) This is a matter for the cargo owners and not for the Crown.
37. (Chairman.) Quite so. But I think we had better discuss it so na to have a basis on which to denl with the cargo owners ?---(Mr. Hughes.) Before you
(Chairman.) I am looking at it as to what the real discuss that I would like to put this question to you.
effect is. I am only discussing the whole thing. The Crown takes a ship, and the company runs the ship for the Crown. The Crown is the owner for the time being.
(Mr. Tennyson.) Yes.
(Chairman.) And the Crown stands absolutely in the position of the owner, as nobody else can.
(Mr. Tennyson.) That is so-Mr. Richards.) That simplifies it enormously.
(Chairman). Is not that the legal position?
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(Mr. Tennyson.) I think the difference is this. have been acting on the assumption, following the report of the Conference, that we would only allow the ship to be utilised if we were guaranteed against uny loss. You are suggesting that we should act upon the assumption that we are upon a commercial venture and should take the risk ourselves.
(Chairman.) It is not a commercial venture because we shall not unike anything out of it. It is a very lad scheme from our point of view, just about as bad as you could have it. But it is not that; it is a matter of policy as to whether we do not have to push the thing along in order to keep our own trade going. It is for the benefit of the trading community; that is what it is for.
Mr. Tennyson.) I should personally be quite willing 10 meet Mr. Hughes on that ground.
31. (('hairman.). I do not think we are going to take any loss if we insist upon the insurance of the ship up to her full value?—(Mr. Hughes) Market value.
market value? (Mr. 32. (Chairman.) Yes, Richards.) For all risks.
33. (Chairman.) Yes?—And liabilities too. (fr.
Hughes.) That in my opinion would reduce the thing to between 30,0007, and 40,0001. That makes a great difference.
(Chairman.) Of course it does. But do not yon think that is the right thing. Mr. Tennyson?
(Mr. Tennyson.) I think from the point of view of policy that is perfectly right; but we have been pursuing this rather according to the recommendations of that Conference which approached it on the opposite linea.
34. (Chairman). When I suggested at that Confer- ence that we ought to cover ourselves against all loss, I did not then include in that a possible loss from further claims on the part of the enemy owners of the ship. I intended to include in that all ordinary com- mercial loss which would fall on the ship in the course of her ordinary business. I do not think we can fairly put that higher than what Mr. Hughes said just now, the ordinary commercial value of the whole trans- action?That clears up one point. Now there is the question of the vargo." (Mr. Richards.) Who is going to take the risk on the cargo? An insurance could be effected covering merely possible liability and con- tributions not recoverable by reason of liability, for a mparatively small sum; but if an insurance be ffected covering all risks of every description, it will be a far more expensive proceeding. (Mr. Hughes.) We got up to about 15,9002, insurance on the cargo. That frightened us.
35. That is impossible?—Mr. Richards.) There is probably u cargo of μbout 150,000/. in the “Birkenfels"; alyout 70,000l. in the Apoldu," and 30,0007, in the "Hamm." Mr. Hughes) That is only a guess.
We are only thinking, but we think that the value of this cargo is about 250,0007., and we open policies for 250,0002. Unfortunately, the ships are both lost for some reason, and when we get our values in we find that we have made a mistake and that there was a lot of valuable cargo in the ship, und instead of the value being 250,0007, it is 300,0007. Who is going to pay that 50,0001. ? Have I to cover that? I had on exactly similar case the other day. I had a ship coming here with a lot of gum on board, and I valueЛl that gum and the general cargo at about 20,0001. When I got the values it was very expensive gun, and
it was 200,0001. That ship went up from 80,000%, to 200,0001. I jumped at that 80,000%, and found it was 200,0007. and I had to cover 120,0007. We are taking these values at what we think. I want to know who is to pay that difference.
34. (Mr. Holt.). Do not the original policies stand? —Mr. Richards.) I think the original policies do strictly stand, but there is a contention on the part of the underwriters, which I think is not well founded, that where the policies coutain what they call the free of capture, seizure and detention clause, tbal is an absolute warranty there shall be no capture, seizure, and detention; in other words, if such a thing occurs, the underwriters are off the risk. I am sure that is not Hound. We might just us well say that a warranty free of particular average cancels the policy, and I have had a good legal opinion upon that point. Still it is a very prevalent idea, and I think it is due to that idea that the suggestion of the underwriters' risk coming to an end has been made, But the underwriter's risk comes to an end for another reason. The detention of the vessel for causes for which they are not liable, namely, war risks, constitutes a deviation which puts them off the risk unless they are put back on to it by a deviation clause in the policies. Nearly all policies contain a deviation clause, and therefore the position of the assured is that the policy comes to an end only by reason of extra detention constituting a devintion, and the assured can put that right by means of a devintion clause in his policy.
39. Those steamere would not have arrived at their destination until after the outbreak of the war ?—That is so.
40. Would it not be the duty of the owners of that cargo to insure against war risk?-No, there is no obligation.
41. (Chairman.) But it is their duty if they want to protect themselves?-As a matter of fuct this ship sailed shortly before August, and nobody could say that they could have expected war. She only got in two or three days after war was declared, and no human being could say that they should have insured against war risk.
42. (Mr. Tennyga.) I think two of them were actually in port ?--Yes, two were. I do not think you could say there was the slightest negligence on their part. But we must take the position as we find it: they have not covered war risk. (Mr. Hughes) That is to Bay, we do not think they have, Mr. Richards.) The general practice was that only very careful people would cover war risk in ordinary circumstances, and unless there was some such arrangement as that you may take it war risk was not covered, because it was not the practice.
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